Diesel is an important fuel source in South Africa, as it is widely used in the transportation, agriculture, and mining sectors. However, it has also become a critical fuel for Eskom, households and businesses for energy generation to mitigate the economic costs of prolonged load shedding \u2013 which has led to expert concerns that the country\u2019s fuel supply chain is under pressure.<\/p>\n
According to the City Press<\/a>, the massive increase in the consumption of diesel by Eskom, the lack of fuel storage and refineries in operation, and the fact that South Africa imports almost all of its fuel are the cause for concern.<\/p>\n Feedback from industry indicated that diesel supplies are under pressure, the paper reported.<\/p>\n Eskom, over the past nine months, has bought 37% more diesel to keep its open-cycle gas turbines running (OCGT) than it did in the corresponding period of the previous financial year \u2013 purchasing around 722 million litres of diesel in Q3 of 2022 compared to 526.3 million litres in 2021, said City Press.<\/p>\n The company\u2019s OCGTs are meant to be run only during peak energy demand periods when the regular coal stations cannot handle the surplus.<\/p>\n This rampant increase in diesel usage led to Eskom announcing that it had run out of diesel in November 2022.<\/p>\n Adding to the issue is that South Africa is a net importer of fuel \u2013 importing 90% of our crude oil \u2013 leaving the country vulnerable to fluctuations in the global market and potential disruptions in the supply chain, said Royale Energy Group chair Mpho Dipela.<\/p>\n The situation is exacerbated by the many closed refineries in the country. Only Sasol’s refineries are currently operating.<\/p>\n South Africa has also struggled with inadequate infrastructure for storing and distributing diesel. There have been shortages at fuel stations due to a lack of storage capacity and problems with the distribution network, including damaged pipelines and bottlenecks at ports over the last few months.<\/p>\n The Liquid Fuel Wholesalers Association said in October that fuel rationing could be introduced locally due to insufficient strategic fuel reserves and refining capacity.<\/p>\n Eskom recently received a significant lifeline from PetroSA<\/a> in the form of 50 million litres of diesel to keep its open-cycle gas turbines running (OCGT). However, energy analyst Clyde Mallinson from Virtual Energy and Power said this would not last very long.<\/p>\n On Friday (16 December), Eskom pushed load shedding back to stage 6<\/a>, citing that the escalation was necessary due to the failure of 8 generating units overnight and the excessive reliance on open-cycle gas turbines and pumped storage generation that is rapidly depleting these reserves.<\/p>\n This is already a telling sign of how far the 50 million litres of diesel will go. The power utility also requested R19.5 billion to buy more diesel. However, the response from the Treasury was negative.<\/p>\n